Homeowners insurance is being canceled because of climate change

Good morning. I’m Mark Arsenault, filling in as the main Starting Point writer this month. Today we’re checking in on the real-life effect of climate change on homeowners insurance.
TODAY’S STARTING POINT
We experience climate change personally and most poignantly when a cascade of events finally catches up with us. Consider this sequence:
A changing climate leads to freakier weather – storms that are more destructive and more frequent, rising seas and heavier precipitation that exacerbate flooding, heat waves that dry out vegetation, and longer droughts that make the land more vulnerable to fire.
Storms, floods, and wildfires lead to homeowners suffering vast and catastrophic damages.
Massive damages lead to insurance companies getting absolutely clobbered with many costly claims.
And all that clobbering leads to insurers pulling out of certain high-risk regions, refusing to issue or renew policies in certain areas, or increasing rates so high that some customers can’t afford to pay. Some choose to take their chances and let their policies lapse.
That’s where we are now. Some insurers are already pulling out of disaster-prone states, such as Florida, highly susceptible to hurricanes and flooding. In 2023, AAA announced it would not renew policies for some Florida customers. Across the country that same year, Allstate announced that it would stop selling property and casualty coverage to new customers in fire-prone California, where historic wildfires this winter around Los Angeles have led to loss of life and caused an estimated $250 billion in damages and economic harm.
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But it’s not just in extreme-weather states that consumers are feeling the burn at the end of the cascade.
”Southern New England, the Carolinas, New Mexico and counties in the Northern Rockies, Oklahoma, and Hawaii all suffer from high non-renewal rates,” the US Senate Budget Committee said in a report last month, “demonstrating that the full panoply of climate-related effects (hurricanes, wildfires, severe convective storms, hail, extreme precipitation, and sea level rise) are all destabilizing insurance markets.”
In 2023, Massachusetts had the fifth-highest non-renewal rate for homeowners insurance in the country, behind Florida, Louisiana, North Carolina, and California. Our main issue is not wildfires, but flooding exacerbated by sea-level rise. In flood-prone areas, particularly Cape Cod and the islands, as many as one in nine policies went unrenewed, according to the government data analyzed by the New York Times.
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The Senate investigation found “a correlation between rising non-renewal rates and rising premiums,” suggesting that climate change is becoming a major pocketbook issue for many American families.
Of course, climate change is also a political issue, with Americans expressing opinions ranging from extremely alarmed to snidely dismissive. In a certain sense, the insurance industry’s dollar-driven concerns are politically pure.
”I’ve always felt that the thing that would drive climate response is the insurance companies,” Andrew Gottlieb, executive director of the nonprofit Association to Preserve Cape Cod, told me last week. “They’re the ones taking a cold-eyed look at loss and risk.”
Gottlieb said the Cape has been remarkably lucky, in that it has enjoyed decades without a significant hurricane, since Hurricane Bob in 1991. “At the same time, we are extraordinarily vulnerable” due to the amount of new development on the Cape and the recent type of home building – mostly very big and very expensive.
Major weather events aside, flooding is becoming a regular Cape problem. “There are documented cases of severe, impactful flooding on the Cape,” he said. “And if the insurance industry was not paying attention, then that would be surprising.”
Surf Drive in Falmouth, for instance, a coastal road on the southern end of town, has become infamous for periodically flooding on high tides. “Not storms,” said Gottlieb. “It just floods.” The road and the homes on it may one day have to be abandoned.
Shoreline loss caused by more violent storms is another issue. An oceanfront Nantucket home that sold for just $200,000 six months ago was knocked down by work crews a couple of weeks ago after it was condemned because of beach erosion.
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The issue is that the waters off Cape Cod are warming faster than nearly any in the world, as the Globe has reported:
”Perfect summers have grown hotter and muggier. Storms arrive violently, and more often. Occasionally, nature sends up an even more ostentatious flare: A historic home vanishes. The earth opens up and swallows a Honda Civic. A seasoned fisherman on the waters off Provincetown peers over starboard and spies an unmistakable shock of electric green: mahi-mahi, visiting from the tropics.”
Gottlieb’s organization is working on salt marsh restoration projects on the Cape, which can help buffer against flooding, and the Association is a founding member of the Cape Cod Climate Change Collaborative, aimed at reducing the region’s carbon footprint.
But as the Senate Budget Committee put it, “unless the United States and the world rapidly transition to clean energy, climate-related extreme weather events will become both more frequent and more violent, resulting in ever-scarcer insurance and ever-higher premiums.”
What can residents do? If you can afford it, move to an area less subject to natural disasters. Yes, that’s disruptive, but not as disruptive as losing your house. If you are denied private insurance, 34 states (including Massachusetts) and the District of Columbia will act as insurers of last resort, offering FAIR plans. Those are state-run programs that are financially supported by a collection of private insurance companies that share the risks and costs.
Of course, the only real answer is to arrest the advance of climate change. And the world isn’t doing very well on that score.
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POINTS OF INTEREST
A woman’s dress shoe was on display in front of a case full of battered shoes that belonged to Jewish prisoners at Auschwitz, part of a traveling exhibition. Musealia
NEVER AGAIN: Today is the 80th anniversary of the liberation of the Nazis’ Auschwitz death camp in Poland in 1945. The United Nations will hold a Holocaust Memorial Ceremony at 11 a.m. EST at UN headquarters in New York, streamed live on UN WebTV, YouTube, and X. The Holocaust Memorial Museum in D.C. is holding a daylong commemoration.
SNOW OUTLOOK: Two weak clipper systems are set to race across New England late Tuesday into Wednesday, bringing light snow showers, mainly up north in New Hampshire, Maine, and Vermont.
SCANDAL IN THE BERKSHIRES: An in-depth look at the sex abuse accusations that rocked Miss Hall’s, an elite boarding school for girls in the Berkshires where an alleged sexual predator operated for decades. (Vanity Fair)
STICKING WITH DEI: Costco’s shareholders voted overwhelmingly to reject a conservative think tank’s effort to quash diversity efforts at the retail wholesaler, bucking the trend of companies such as Walmart, Google, Meta, and McDonald’s that have changed policies in the face of pressure. (Quartz)
MINIMUM LIFE: Fast food is a staple of American culture, but many of its workers – mostly women and disproportionately Hispanic – are struggling to survive. (AP)
BRADY ABODE: Former Patriots QB Tom Brady is entertaining bids on his newly-built mansion on exclusive Indian Creek Island in Miami and reportedly has received offers of more than $150 million. (Business Insider)
DON’T THINK TWICE: The actor Timothée Chalamet hosted “Saturday Night Live” and performed Bob Dylan songs as the musical guest.
HOT TICKET: At the Sundance Film Festival, the most in-demand movie was a Rose Byrne and Conan O’Brien psychological thriller that premiered Friday and will be released nationally this year. (AP)
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YOU MAKE STUFF COME ALIVE: A resident of the central Oregon city of Bend says he was the person behind some of the googly eyes that appeared on sculptures around the city in recent months and sparked a viral sensation. (AP)
BLANK SCREENS: Why I won’t let my kids watch YouTube videos and other thoughts on controlling the social media your kids use. (The Cut)
THE TRUMP ADMINISTRATION
Gustavo Petro , turned away two US military planes carrying migrants because, he said, they were being mistreated, Trump threatened hefty tariffs, and Petro threatened tariffs of his own, things were finally settled when Petro relented and After a tit-for-tat fight in which the president of Colombia,, turned away two US military planes carrying migrants because, he said, they were being mistreated, Trump threatened hefty tariffs, and Petro threatened tariffs of his own, things were finally settled when Petro relented and agreed to accept the flights
Trump fired about 17 independent inspectors general at government agencies who are supposed to conduct oversight of his administration. The move appears to violate federal oversight laws.
Pete Hegseth starts his new job as defense secretary today and faces a slew of controversies, from global conflicts to border security to aid to Ukraine.
JD Vance said he supports immigration raids on schools and churches because they could have a “chilling effect.” He also defended Trump’s decision to pardon Jan. 6 rioters who assaulted cops. ( Vice Presidentsaid he supports immigration raids on schools and churches because they could have a “chilling effect.” He also defended Trump’s decision to pardon Jan. 6 rioters who assaulted cops. ( CBS News
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Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him @bostonglobemark.